Stagflation

A mix of stagnant growth, high unemployment, and high inflation.

Stagflation is the rare and painful combination of weak economic growth, rising unemployment, and persistent inflation. It defies the usual trade-off where inflation falls as the economy slows. The 1970s oil shocks are the classic example, leaving central banks with no easy policy fix.

The 1970s brought stagflation, as prices soared even while growth stalled and jobs vanished.